In Full Flower

What the founders of Austin’s are teaching online entrepreneurs about how to grow a business.

For newcomers to Austin, starting a garden can bring on a sort of horticulture shock. From drought and deer to floods and blight, the growing conditions in the state capital would make even the Jolly Green Giant lose his chlorophyll. At bottom, gardening is really about dirt, and the rock-hard caliche of much of Central Texas is better suited for roadbeds than flower beds.

When it comes to virtual gardening, however, Austin appears to be considerably more congenial., an Internet gardening business started in the state capital in 1995 by New Englanders Cliff and Lisa Sharples and Midwesterner Jamie O’Neill, has been growing like kudzu: In its relatively short life it has swallowed up a major competitor, cut deals with venerable older companies, and most recently, branched out into the “real” world with a magazine. But while its young founders have discovered computers and compost to be surprisingly complementary, they’ve also been learning about the kinds of stress that cause a lot of people to take up gardening in the first place. Indeed, their original name for the company was Garden Escape. But almost immediately they realized that e-commerce—in particular, the online selling of plants—wasn’t going to be a walk in the park.

The Sharpleses—he’s 35, she’s 32—and 35-year-old O’Neill first met in the graduate business program at Northwestern University, in Evanston, Illinois. They moved to Austin in 1995 after being recruited by a software company, Trilogy Development Group, but soon decided to strike out on their own. They wanted to stay in Austin, where they thought they wouldn’t be lost in a sea of start-ups, as they might have been in Silicon Valley, and where, as it happened, Cliff’s brother Brian was the president of a market-research firm, IntelliQuest. And they liked the idea of a friendly, sandals-and-jeans corporate culture.

The three were casting about for an idea for an Internet business when Lisa suggested gardening. She and Cliff had just bought their first house and wanted to start a garden, but they realized they needed advice on what plants would thrive. Although Lisa’s mother is a master gardener and a former president of the prestigious Wellesley Garden Club in Wellesley, Massachusetts, she couldn’t really help in her daughter’s battle with sun-baked Austin. “Wouldn’t it be cool to go on the Internet,” Lisa asked, “and be able to find the most appropriate plants for your area—and how to grow them?”

The men were dubious at first—especially Jamie, who had been required as a child to help his parents with their competing vegetable gardens. “I grew up dreading zucchinis,” he says. But Lisa persisted, and before long her idea began to take root. It fit the profile of the kind of business they were looking for. “We wanted to find an industry where there weren’t huge power brokers,” Cliff says, “where no one was going to try to stop us.” Although gardening is the country’s number three leisure pastime and the gardening industry has annual sales of $40 billion, it isn’t dominated by any single company or consortium. “It’s an incredibly fragmented business,” Cliff explains. Even a well-established company like Smith & Hawken is not a household name. Gardeners tend to buy plants from locally or regionally owned nurseries or order them from an assortment of catalogs, many of which specialize in certain types of plants or supplies. In recent years novice gardeners have also started buying plants from big home-improvement outlets like the Home Depot, even though the plants generally don’t come with much advice on how to grow them. “We felt that the retail channels out there weren’t serving average consumers that well,” Cliff says.

The enterprising trio set up shop in Cliff and Lisa’s garage apartment, with seed money provided by Jamie’s credit card (which is now hanging, framed, in one of’s conference rooms). It was a nineties high-tech version of a thirties Busby Berkeley musical: “Hey, kids, let’s put on a show.” They were able to buy the Web address for just $2,500 from an Arizona software company that had owned it—a bargain given the domain-name scalping that goes on these days. But they knew they’d need some serious money to create a state-of-the-art site and develop new services that weren’t offered anywhere else.

In late 1995, when they were developing their business plan, the dominant model for making money on the Web was ad sales—the same model that prevails in broadcasting and magazine publishing., the electronic bookstore, had just gone online, and sales from its site had not yet taken off. But they were convinced that the Web represented a new way of selling products and that there was an audience to sell them to. Gardening is part of the current megatrend known as cocooning, which includes home decorating and cooking. According to the National Gardening Association, today’s gardeners tend to be well educated, affluent, and computer savvy. Dubbed “yardeners,” they’re more interested in having a beautiful back yard than, say, developing a new variety of rose.

The partners planned to make money the old-fashioned way, by taking a percentage of profits from product sales. They wouldn’t actually grow or warehouse anything themselves; instead, they would send orders electronically to the suppliers they would sign up for the Web site. They believed they could attract customers to the site by using the electronic innovations that Web surfers take for granted, including an enormous database of information, an array of goods for sale (everything from trowels to seedlings), and interaction with experts. Their virtual nursery would be a hybrid of a library, a catalog, a magazine, a talk show, and a superstore. “The idea was to help gardeners succeed,” Lisa says. “We learned that new gardeners tend to blame themselves when plants die. That can get discouraging.”

While this kind of super-infomercial approach to the Web has since become commonplace, back then it seemed risky to some of the venture capitalists they approached for start-up funds—particularly those with no gardening experience. Lisa recalls that one potential investor’s experience with

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